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Source: (consider it) Thread: The social-progressive mindset
Martin60
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Fuck 'authentic'. Tax wealth.

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Love wins

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Karl: Liberal Backslider
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# 76

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Yeah, "you made a lovely pot, but you can't piss in it because you need the money to buy bread. But you're so authentic"

A properly recompensed potter is better still. Working for a living and still having bugger all is an abomination.

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Might as well ask the bloody cat.

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Golden Key
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# 1468

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quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Russ:
Do you seriously think that anyone believes that politics is there to serve the rich ?

Yes, lots of people. The Rich, for a start. Do you seriously think the Kochs spend all that money on politicians without expecting to reap the benefit she for themselves?

This.

And many of us non-rich assess the situation that way, even if we deeply believe that politics *should* be for everyone.

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RuthW

liberal "peace first" hankie squeezer
# 13

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quote:
Originally posted by Russ:
Do you seriously think that anyone believes that politics is there to serve the rich ? Which author has written that they believe that ? Which politician has made speeches exhorting us to believe that ?

Not just our politics. Our very governments are there to serve the rich. The law protects property rights at least as much as personal rights, therefore offering more protection to those who own property than those who do not.

Read John Locke, William Blackstone, James Madison, Thomas Jefferson -- just off the top of my head. They don't come out and say politics, government and the law are there to serve the rich; what they do is explain and defend property rights. Those of us who do not own property know when we are being told we can fuck off and die.

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Soror Magna
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quote:
Originally posted by Russ:
...Do you seriously think that anyone believes that politics is there to serve the rich ? ...

quote:
Originally posted by Russ:
... For the specific claim that politics should be for the benefit of the rich rather than for everyone ?...

I spy, with my little eye, a moving goalpost. Politics currently IS working to the benefit of the rich pretty much everywhere, but it SHOULDN'T.

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mr cheesy
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quote:
Originally posted by Russ:
That doesn't look to me like an argument that politics should be for the benefit of the rich. It looks like an argument that the good society is one where individuals are free to self-actualize, to create and make a living from their creations.

Maybe you're not trying very hard or lack imagination. Ayn Rand talked about individualism as a virtue - and it isn't hard to see how that turns out to be the elevation of the rich in the body politic.

It's a small number of logical steps: 1. those who can look after themselves rather than rely on a supportive state are morally superior 2. the rich can obviously look after themselves to a greater extent than others 3. and if we describe them as "job creators" then we create a situation whereby it becomes essential, and moral, to pander to the needs of the wealthiest and to downplay the needs of the poorest.

That's a bastardisation and oversimplification, but I'd be surprised if anyone has read Ayn Rand and not come to the conclusion that this is the society she thinks is the most moral.

quote:
So that a poor potter is a more authentic human being then someone who gets a higher income by living on the dole.

The rich as a class do not appear to merit a mention in this summary of Rand's philosophy.

Well, y'know, like all philosophy it helps if (a) you bother to familiarise yourself with the basics of it before commenting on it and (b) you're prepared to think through the direction of it and where it might be going so that (c) you understand how people are today using it to underscore their political philosophy.

quote:
Which is why I was asking whether there's a specific work or section of her work which addresses the rich and their role in society. A specific quote which demonstrates that she advocates the specific view which I'm suggesting that nobody holds.
Just read the damn thing already, or if you can't be bothered to do that then get a inkling of the basics by reading the zillions of articles across the internet about it.

Can I point you to a single sentence in Atlas Shrugged which makes this case? No.

Because I don't have the thing to hand and because I can't bring myself to read it again.

But just because I can't do that doesn't mean that what I've outlined above is incorrect. And if you disagree, you're not just arguing with me, you're arguing with those who say that they look to Ayn Rand for the basis of their political philosophy and who take a similar line.

Read it, read the commentaries and make up your own mind.

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arse

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mr cheesy
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quote:
Originally posted by RuthW:


Read John Locke, William Blackstone, James Madison, Thomas Jefferson -- just off the top of my head. They don't come out and say politics, government and the law are there to serve the rich; what they do is explain and defend property rights. Those of us who do not own property know when we are being told we can fuck off and die.

Well there is also this, isn't there. Historically politics has almost always been about exclusion of the majority, with only very recent moves towards inclusion of the needs everyone.

And there is obviously some inertia when it comes to taking away some of the privilege that the political classes have enjoyed and spreading it out to the "unworthy". And this is another reason why the evil crap that Ayn Rand came out with had so much traction; if one can paint meeting the needs of a large proportion of the population as a "waste" of federal/government funds then it is very likely that one will think that the sun shines out of the backsides of the "wealth creators" - who coincidentally also seem to be the wealthiest and most politically active in society.

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arse

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Russ
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quote:
Originally posted by Soror Magna:
quote:
Originally posted by Russ:
...Do you seriously think that anyone believes that politics is there to serve the rich ? ...

quote:
Originally posted by Russ:
... For the specific claim that politics should be for the benefit of the rich rather than for everyone ?...

I spy, with my little eye, a moving goalpost.

Not at all. The construction "is there to" is a statement of purpose. Which combines with the unstated premise that institutions should serve their purpose, to reach a conclusion about what should be.

If you were to say that the Church is there to save souls (or is there to preach the gospel, or whatever) you would be arguing that the Church should be focussing its attention and resources on fulfilling that mission.

I'm not sneaking in a transition from "is" to "ought".

And politics should of course serve everybody - rich, poor, and inbetween. It should be Us - we, the people - getting together to do collectively what we can't do (or can't do nearly so well) individually.

Not this horrible notion of a zero-sum game where you win by getting together a coalition of 51% of the people to screw money out of the other 49%. That's not "serving everybody".

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

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Soror Magna
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quote:
Originally posted by Russ:
...
Not this horrible notion of a zero-sum game where you win by getting together a coalition of 51% of the people to screw money out of the other 49%. That's not "serving everybody".

Well, the current game is 1% screwing the other 99% out their money. The system we have now is most definitely not serving everybody. What do you think should be done about it?

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mr cheesy
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quote:
Originally posted by Russ:

And politics should of course serve everybody - rich, poor, and inbetween. It should be Us - we, the people - getting together to do collectively what we can't do (or can't do nearly so well) individually.

I'm puzzled why you think those with existing privilege think that they should help those without. The evidence appears to be that in almost all situations those with power, money and influence want to keep it for themselves.

quote:
Not this horrible notion of a zero-sum game where you win by getting together a coalition of 51% of the people to screw money out of the other 49%. That's not "serving everybody".
But who actually ever talks about politics being the service of everyone?

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arse

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Martin60
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Russ, do you think it's socially progressive that workers pay three times as much tax as shareholders?

[ 30. September 2017, 15:46: Message edited by: Martin60 ]

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mr cheesy
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I don't think that social progressive politics are those that focus on everyone - instead they're the politics which are trying to redress the inbuilt imbalance in society, which traditionally has given advantage and favour to a few.

It is a false balance to say "oh wait, you're focusing on the poor, when are the rich going to get a break" when the rich already have a break.

If the rich are taxes in ways that the poor are not, is that unfair, somehow not socially-progressive? Only in a dream-world where it is possible to imagine a situation where the rich few get all possible advantages whilst the poor are not screwed into the ground.

Back in the real world, the rich usually have to be physically stopped from stealing all the cookies for themselves and begrudging the crumbs that fall to anyone else.

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arse

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Dafyd
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quote:
Originally posted by Russ:
And politics should of course serve everybody - rich, poor, and inbetween. It should be Us - we, the people - getting together to do collectively what we can't do (or can't do nearly so well) individually.

Not this horrible notion of a zero-sum game where you win by getting together a coalition of 51% of the people to screw money out of the other 49%. That's not "serving everybody".

Which notion is 'this' horrible notion? Has somebody been advocating anything that can honestly be described that way? I must have missed it.

Ryanair / Uber et al have been running a business model that keeps prices down in part by not adequately paying their staff, and customers go along with that. That might count. Likewise, the present UK government is currently trying to cut its bills by not adequately paying public sector workers, which again might qualify. I think it would be more clearly described as screwing labour / work out of the people who are being paid low wages or salaries, or who are not being paid at all when on stand-by or moving between assignments.

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Russ
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quote:
Originally posted by mr cheesy:
I don't think that social progressive politics are those that focus on everyone - instead they're the politics which are trying to redress the inbuilt imbalance in society, which traditionally has given advantage and favour to a few.

I think you're right. What we're talking about is a philosophy of redress. Of reversing traditional biases (rather than eliminating or transcending them).

It's not advocating a desired end-state. It's advocating a cultural leaning in the opposite direction from the traditional one.

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

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Martin60
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Traditional biases like workers paying three times as much tax as capitalists?

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Posts: 16679 | From: Never Dobunni after all. Corieltauvi after all. Just moved to the capital. | Registered: Jun 2001  |  IP: Logged
Russ
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quote:
Originally posted by Martin60:
Russ, do you think it's socially progressive that workers pay three times as much tax as shareholders?

I don't think that's part of the social progressive mindset that we're talking about at all.

Not only because it's economic rather than social. But mainlt because this mindset sees "workers" as a group who are traditionally disadvantaged (relative to the owners of land and capital) and are therefore Victims to be sympathised with and their interests supported.

If you meant to ask whether I think it just that workers pay three times as much tax as shareholders, then I'd have to answer that

a) that's a hard question - taxes are a necessary way of paying for government services, so that it is not possible to pronounce definitively on what is a just tax in the absence of information on what services the money is spent on.

But

b) intuitively it seems to me that if I set aside some part of my current wages to provide for an income in retirement, and if I invest that money in the shares of a wealth-generating business (rather than under the mattress or speculating on property prices) then there's a case for taxng that income from shares more lightly, either to incentivize behaviour that supports the common good, or because I've already had to pay tax on the capital that is generating the income.

I don't see any clear watershed where "the rich" cease to be people like us but with a bit more money and become greedy bloated plutocrats.

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chris stiles
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quote:
Originally posted by Russ:
I think you're right. What we're talking about is a philosophy of redress. Of reversing traditional biases (rather than eliminating or transcending them).

Would would you consider 'eliminating' or 'transcending' those biases to actually consist of? Other than declaring a year zero where we started to pretend they don't exist?

Because in this entire thread I've not seen you do anything else than defend the status quo.

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Martin60
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Keep digging Russ.

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Dafyd
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quote:
Originally posted by Russ:
I think you're right. What we're talking about is a philosophy of redress. Of reversing traditional biases (rather than eliminating or transcending them).

Perhaps you could explain how you eliminate a traditional bias without reversing it at some point?
If you miss your station I presume you get off the train at the next stop. But you don't get on the train going the other way because that would be reversing your mistake instead of eliminating it?

Would it be fair to say that the difference between eliminating a traditional bias and reversing it is that anything progressives think should be done now is reversing traditional biases? But anything progressives achieved in the past is merely eliminating them?
So when progressives advocated abolishing slavery that was reversing a traditional bias? But once slavery was abolished it became merely eliminating a traditional bias, and granting the ex-slaves voting rights became reversing the traditional bias?
And then once ex-slaves had voting rights that became eliminating a bias, but ending segregation was reversing the bias?
That seems to be the reasoning here.

quote:
It's not advocating a desired end-state.
You say that like it's a bad thing?

quote:
It's advocating a cultural leaning in the opposite direction from the traditional one.
No it isn't.
If you've been wearing blue spectacles all your life and you take them off then it will look as if there's now a bias towards red and green that leans in the opposite direction.

[ 01. October 2017, 14:31: Message edited by: Dafyd ]

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Soror Magna
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quote:
Originally posted by Russ:
I think you're right. What we're talking about is a philosophy of redress. Of reversing traditional biases (rather than eliminating or transcending them).

...

There's no point in redressing an injustice without addressing the source of the injustice. If injustice is caused by a traditional bias, and if one is serious about redressing injustice, it would be nuts not to make an effort to eliminate the bias; otherwise, you'll just be stuck redressing over and over and over again. Followed by "those people are never happy, race shouldn't matter, women want more rights, everybody is equal now, criminals have all the rights, it's never enough, time to move on, nobody owns slaves today" and so on. Gosh, that sounds familiar ...

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

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Leorning Cniht
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quote:
Originally posted by Russ:

b) intuitively it seems to me that if I set aside some part of my current wages to provide for an income in retirement, and if I invest that money in the shares of a wealth-generating business (rather than under the mattress or speculating on property prices)



I don't think the line between "wealth-generating business" and "price speculation" is as easy to draw as you think.

quote:
then there's a case for taxng that income from shares more lightly, either to incentivize behaviour that supports the common good, or because I've already had to pay tax on the capital that is generating the income.
So if I take my wages, and purchase a pile of widgets and sell them at a profit, I shouldn't have to pay tax on my profits because I already paid tax on my income. And then I take those profits and buy more widgets, and shouldn't pay tax because I'm still profiting from my taxed income. And before long I have a massive widget-trading business which shouldn't be taxed because my seed capital was taxed income?

You can easily accomplish your desired goal (incentivize retirement savings) with your choice of variation on any one of the many retirement savings plans in existence that allow you to invest pre-tax income and defer the tax until you retire, have your investments grow tax-free within your retirement account, and so on.

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mr cheesy
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# 3330

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quote:
Originally posted by Russ:

b) intuitively it seems to me that if I set aside some part of my current wages to provide for an income in retirement, and if I invest that money in the shares of a wealth-generating business (rather than under the mattress or speculating on property prices) then there's a case for taxng that income from shares more lightly, either to incentivize behaviour that supports the common good, or because I've already had to pay tax on the capital that is generating the income.

I don't see any clear watershed where "the rich" cease to be people like us but with a bit more money and become greedy bloated plutocrats.

It seems to me that you like the idea of having taxes to pay for things as long as you don't actually have to be the one paying and as long as you are the one benefiting.

The irony being that if you were ever in a situation where you needed the protection of the services you here are suggesting you don't like paying for, no doubt you'd quickly assert your right to that public service.

[ 02. October 2017, 07:08: Message edited by: mr cheesy ]

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arse

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Crœsos
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# 238

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quote:
Originally posted by Russ:
quote:
Originally posted by Martin60:
Russ, do you think it's socially progressive that workers pay three times as much tax as shareholders?

I don't think that's part of the social progressive mindset that we're talking about at all.

Not only because it's economic rather than social.

I disagree that this is a clean or easy distinction to make. For example:

quote:
Originally posted by Russ:
If you meant to ask whether I think it just that workers pay three times as much tax as shareholders, then I'd have to answer that

a) that's a hard question - taxes are a necessary way of paying for government services, so that it is not possible to pronounce definitively on what is a just tax in the absence of information on what services the money is spent on.

But

b) intuitively it seems to me that if I set aside some part of my current wages to provide for an income in retirement, and if I invest that money in the shares of a wealth-generating business (rather than under the mattress or speculating on property prices) then there's a case for taxng that income from shares more lightly, either to incentivize behaviour that supports the common good, or because I've already had to pay tax on the capital that is generating the income.

Note that there's a conflation of two different things. The first is whether money earned through labor (wages) should be taxed as heavily or more heavily than money earned by already having money (investment). The second is whether income dedicated to certain approved purposes (in this case retirement savings) should receive favorable tax treatment. There's no reason these two questions shouldn't be considered separately. Not all (or even most) income derived from investments is dedicated to retirement savings, nor is all retirement savings derived from investment income.

But this also demonstrates the blurry line between what's "social" and what's "economic". Is mitigating poverty among the elderly a "social" action, or does it count as "economics" if achieved through favorable tax policies? For that matter the very idea of "retirement", an extended period of old age not devoted to paid labor, is a relatively recent development. Does it count as "social" or "economic"?

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Humani nil a me alienum puto

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Dafyd
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quote:
Originally posted by Crœsos:
quote:
Originally posted by Russ:
I don't think that's part of the social progressive mindset that we're talking about at all.

Not only because it's economic rather than social.

I disagree that this is a clean or easy distinction to make.
I did think that in the OP Russ 'suggested' that being anti-capitalist was part of the social-progressive mindset. Being anti-capitalist seems like an economic position to me.
But really if one tries to chase down every contradiction or shift in Russ' suggestions one would spend far more time on them that they are worth and it wouldn't be any fun.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Russ
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# 120

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quote:
Originally posted by Dafyd:
I did think that in the OP Russ 'suggested' that being anti-capitalist was part of the social-progressive mindset. Being anti-capitalist seems like an economic position to me.

I'd agree that believing in an alternative to capitalism is an economic position.

What I was attempting in the OP was a one-word (OK, maybe two, depending on how you count hyphens) summary of each of a number of positions which I perceive to form part of this mindset.

One of those is a general lack of sympathy with business; a tendency to think profit a dirty word that is synonymous with exploitation; a tendency to think that employing someone involves obligations beyond paying a fair day's wage for a fair day's work, & to sympathize always with the employee against the employer.

And we've discussed how that fits with other aspects of the progressive worldview.

If you want to suggest a better summary word, or short phrase, feel free. Finding a terminology acceptable to both sides was part of the original aim. However distracted we may get by various tangents.

But what I'm talking about is really more of a prejudice than an economic theory.

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

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Crœsos
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quote:
Originally posted by Russ:
If you want to suggest a better summary word, or short phrase, feel free. Finding a terminology acceptable to both sides was part of the original aim. However distracted we may get by various tangents.

I'm pretty sure that the semantics you're looking for is "every change to Western civilization in the 20th and early 21st century that Russ personally disagrees with", though I admit it doesn't seem to exactly roll off the tongue. Still, it would seem to fit your repeated rejection of any descriptives other than the ones offered by you.

quote:
Originally posted by Russ:
One of those is a general lack of sympathy with business; . . . a tendency to think that employing someone involves obligations beyond paying a fair day's wage for a fair day's work, & to sympathize always with the employee against the employer.

So a "social progressive" might maintain that beyond paying wages an employer is obligated to keep their workplace "free from recognized hazards that are causing or are likely to cause death or serious physical harm" (language cribbed shamelessly from the U.S. Occupational Health and Safety Act), whereas the opposing view (the anti-social regressive mindset?) might have more sympathy for the United States Radium Corporation than for its dying employees, for example?

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Russ
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# 120

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quote:
Originally posted by Leorning Cniht:

I don't think the line between "wealth-generating business" and "price speculation" is as easy to draw as you think.

Are you saying wealth creation isn't good ? Or speculation isn't bad ? Or that you share the sentiment that one is better than the other but that it's difficult to legislate for that ?

quote:
So if I take my wages, and purchase a pile of widgets and sell them at a profit, I shouldn't have to pay tax on my profits because I already paid tax on my income. And then I take those profits and buy more widgets, and shouldn't pay tax because I'm still profiting from my taxed income. And before long I have a massive widget-trading business which shouldn't be taxed because my seed capital was taxed income?

To the extent that businesses are consumers of government services, they should pay their share of the cost of providing those services, which means some form of taxes and charges.

If your taxed seed capital is tied up in shares or savings plans or unit trusts, then it's not obvious to me that it's consuming more government services that need to be paid for then if it's under the mattress...

quote:

You can easily accomplish your desired goal (incentivize retirement savings) with your choice of variation on any one of the many retirement savings plans in existence that allow you to invest pre-tax income and defer the tax until you retire, have your investments grow tax-free within your retirement account, and so on.

And you're happy with that ?

So if it were the case that shareholders pay less tax because a significant proportion of shareholders are pension funds then that's OK ?

So the original statistic Martin quoted isn't necessarily evidence of injustice ?

But it makes you angry if you think about it in terms of honest hard-working labourers paying less than lazy greedy spoiledbrat rich investors ?

--------------------
Wish everyone well; the enemy is not people, the enemy is wrong ideas

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mr cheesy
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# 3330

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quote:
Originally posted by Russ:
Are you saying wealth creation isn't good ? Or speculation isn't bad ? Or that you share the sentiment that one is better than the other but that it's difficult to legislate for that ?

It is the dichotomy that is bollocks. Those who mumble on about wealth creators and link it to low tax and low regulation seem to want to suggest that the only thing that it needed in the society is the wealth-creator, that all those who are not, somehow, meeting some arbitrary level of contribution are somehow dead weight and that therefore society should be rewarding them and punishing the poor.

It is as if they believe that the "wealth-creator" lives in a vacuum, where they're heroically generating the wealth, which is employing the masses and paying the taxes which keeps everyone else afloat.

And that everyone else should be grateful for their selfless generosity. Even though the rest of us have paid for the roads, the schools, the infrastructure and the society that you're exploiting to make money.

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arse

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Dafyd
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quote:
Originally posted by Russ:
One of those is a general lack of sympathy with business; a tendency to think profit a dirty word that is synonymous with exploitation; a tendency to think that employing someone involves obligations beyond paying a fair day's wage for a fair day's work, & to sympathize always with the employee against the employer.

Below you appear to say that you share the sentiment that wealth creation (which is what the employees do) is better than speculation (which is in a large modern business what the employers - the shareowners, investors, etc, do). Does that make you a social-progressive?

I would have thought that the idea that there is such a thing as a fair day's wage for a fair day's work is itself a socially-progressive position. After all, it implies that the business owner has some obligation not to negotiate down the price of labour beyond a fair level.
It is somewhat incompatible also with an idea that profit is an unlimited good. If the business is bringing in a lot of money fairness would seem to imply that the money is shared among the people who do the work. Whereas profit means that the money goes to the people who didn't do the work.

(For the above purposes we'll assume a division between employees who work and employers who own. In many businesses some of the employers will also work and therefore be also employees. Looked at in a certain way - through the eyes of a visiting Amazonian tribesman or a Martian - there's room for a conflict of interest there, above and beyond anything we think of the role of the employer.)

Let's consider two cases.
Case one:
Four people get together and decide to set up a baker's. Obviously if they all work equally hard fairness suggests that they all share the proceeds equally (they might decide that if one of them falls ill they should continue to give them a share on the grounds that in the abstract it could happen to any of them).
Now of course they need an oven to get started. Let's say they bring in a fifth person, Five, to provide the oven. Five isn't a baker and doesn't do any baking. Now presumably it's fair to provide the man with a share in the proceeds for whatever work he does checking that the oven is still working, cleaning it, and so on. Perhaps Five also does some administrative work. A fair share would be proportional to the effort that takes relative to baking. And of course they should pay Five for the oven out of everyone's shares. Suppose Five doesn't sell them the oven, but keeps the oven. Well, then it would be fair to pay Five for any risk to the oven incurred by the business. So if the business has a 90% chance to go bankrupt and the oven would be lost in that case, then they should pay Five a ninth share of the oven out of everyone's income.

Now in the real world what usually happens is that Five who owns the oven sets the amount that the other four people will receive, as well as the amount Five receives for maintaining the oven and doing the administration. And then Five gets all of the rest of the wealth that has been created by everyone's work, which additional wealth Five doesn't share. How does that happen? Well, usually Five has more savings, so Five can hold out on any deal for longer until the other four give in because they need the money more immediately than Five does.

Now do we think that the situation in which the person with more savings takes a bigger cut is actually fair? It doesn't seem that way at first blush. That's why economists and other commentators who aren't social-progressives are hostile to the idea that there is such a thing as fairness in employer/employee relations. Well, that's not quite true. Usually, when the employer negotiates favourable terms there's no such thing as fairness, there's only the market. On the other hand, when the employees get together and negotiate better terms suddenly that's trying to get more than what's fair.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Crœsos
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quote:
Originally posted by Russ:
To the extent that businesses are consumers of government services, they should pay their share of the cost of providing those services, which means some form of taxes and charges.

If your taxed seed capital is tied up in shares or savings plans or unit trusts, then it's not obvious to me that it's consuming more government services that need to be paid for then if it's under the mattress...

There are a lot of falsehoods and non-sequiturs here, so I'm going to try tackling them one at a time.

First, most taxation systems in industrialized nations are based on income (money changing hands) rather than wealth (money sitting around). As such, "seed capital" (i.e. money invested in some venture) is not taxed in most jurisdictions. The returns on such investments are usually taxed, following the general principle of taxing income. I don't see any particular reason that income derived from price speculation or paid out as a dividend should be taxed less (or exempt from taxation) than income derived from digging ditches or data entry.

Interestingly, purchasing "shares or savings plans or unit trusts" is one of the few purchases most people can make that's not subject to taxation at the point of sale. Most folks pay a sales tax or VAT if they're buying clothing or a meal in a restaurant, but not if they're buying shares in a publicly traded company. In that sense investments already receive favorable tax treatment in most jurisdictions.

As far as consuming government services, most industrialized nations dedicate specific resources to protecting investors against fraud and other malpractice. I find it hard to believe that you've never heard of Charles Ponzi or Charles Keating or Bernie Madoff or any of the other notables in the constellation of financial fraudsters. Or that you're unaware of the government resources dedicated to preventing and/or detecting such actions, which involve a very different set of skills and resources than the basic law and order required to protect the proverbial money under the mattress.

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Humani nil a me alienum puto

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Russ
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quote:
Originally posted by Dafyd:
wealth creation (which is what the employees do)

Oh dear.

I thought you understood economics better than that.

Employees don't create wealth. What creates wealth is the combination of "factors of production". Employees typically supply one of those factors - labour.

Classical economics recognizes two others - land and capital.

But no wealth is created unless someone - an entrepreneur for want of a better term - has the initiative to bring them together and make it happen.

And arguably this can only happen in the context of government action to provide a legal framework, a viable currency etc.

So we could perhaps add two to the classical three factors.

Each of these inputs has to be paid for. Each could, in principle, be compensated by some mix of a fixed rate plus a share of the profits. Subject to the proviso that the shares have to add to 100%.

One model has fixed wages, fixed rent, fixed interest rate and fixed tax rate, with the entrepreneur having no fixed compensation and 100% of the profit. But I see no immediate reason why any of the alternative models should be considered intrinsically just or unjust.

quote:

I would have thought that the idea that there is such a thing as a fair day's wage for a fair day's work is itself a socially-progressive position. After all, it implies that the business owner has some obligation not to negotiate down the price of labour beyond a fair level.

The difficulty, of course, is determining what "fair" is; can it mean something other than the medium-term "going rate" for that particular input ?

And no, if social-progressivism is about redress for perceived past injustice, then advocating any model as being a priori fair is not a social-progressive position.

--------------------
Wish everyone well; the enemy is not people, the enemy is wrong ideas

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mr cheesy
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quote:
Originally posted by Russ:
Oh dear.

I thought you understood economics better than that.

Some believe that Exploitation of Labour is the primary way for capitalists to make profit.

I think it makes a lot of sense: if you have a business which uses robots, then you're going to make money if the robots can create things for less than they cost.

But for the majority of capitalist history to this point, it hasn't primarily been technology and robots that has driven profits, it has been paying wages at far less than the unit of labour is actually worth to the business - and steadily over time paying less and less for that labour as efficiencies improve and productivity increases.

The fact is that the capitalist makes money not because he is clever, not because he is highly skilled and not because he is better motivated than the rest of the workforce, but simply because he has access to capital and can therefore pay employees the minimum he has to to accrue maximum profits.

In a situation like in the UK where the government artificially supports those on low incomes, the government is literally paying capitalists to pay starvation wages and make massive profits.

In any rational and humane system, if it was absolutely necessary to have large organisations (due to economies of scale), they'd be true co-operatives which respected the actual worth of each worker to the business and didn't just see them as an interchangeable robot whose main impact was on the bottom-line of the capitalist's balance sheet.

But, I know how it is. You capitalists are so wedded to the idea that you're right, you know best, you've done something to deserve the wealth you have and you deserve to live in a lifestyle that you don't allow to your own employees that you're not interested in Marx's economic analysis, you're not interested in alternative economic analyses of capitalism like Marxism and Distributism and you're not interested in alternative ways to share out the profits and benefits of a business to all those who contributed to it such as with a co-operative.

Because the only thing that matters is me, me, me.

And then you have the gall to tell others that they don't understand economics.

No friend: we understand all too well.

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arse

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Martin60
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quote:
Originally posted by Russ:
quote:
Originally posted by Dafyd:
wealth creation (which is what the employees do)

Oh dear.

I thought you understood economics better than that.

Employees don't create wealth. What creates wealth is the combination of "factors of production". Employees typically supply one of those factors - labour.

Classical economics recognizes two others - land and capital.

But no wealth is created unless someone - an entrepreneur for want of a better term - has the initiative to bring them together and make it happen.

And arguably this can only happen in the context of government action to provide a legal framework, a viable currency etc.

So we could perhaps add two to the classical three factors.

Each of these inputs has to be paid for. Each could, in principle, be compensated by some mix of a fixed rate plus a share of the profits. Subject to the proviso that the shares have to add to 100%.

One model has fixed wages, fixed rent, fixed interest rate and fixed tax rate, with the entrepreneur having no fixed compensation and 100% of the profit. But I see no immediate reason why any of the alternative models should be considered intrinsically just or unjust.

quote:

I would have thought that the idea that there is such a thing as a fair day's wage for a fair day's work is itself a socially-progressive position. After all, it implies that the business owner has some obligation not to negotiate down the price of labour beyond a fair level.

The difficulty, of course, is determining what "fair" is; can it mean something other than the medium-term "going rate" for that particular input ?

And no, if social-progressivism is about redress for perceived past injustice, then advocating any model as being a priori fair is not a social-progressive position.

Fair isn't becoming a rich bastard on the backs of the poor by using your 'initiative'.

--------------------
Love wins

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Crœsos
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# 238

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quote:
Originally posted by Russ:
Employees don't create wealth.[QB] What creates wealth is the combination of [QB]"factors of production". Employees typically supply one of those factors - labour.

Classical economics recognizes two others - land and capital.

But no wealth is created unless someone - an entrepreneur for want of a better term - has the initiative to bring them together and make it happen.

That seems remarkably selective. Labor doesn't "create wealth" because it's just one factor, but an entrepreneur does create wealth despite the fact that, like an employee, they are also not a tract of land. If the objection applies to one it applies to both.

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Humani nil a me alienum puto

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Dafyd
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quote:
Originally posted by Russ:
quote:
Originally posted by Dafyd:
wealth creation (which is what the employees do)

I thought you understood economics better than that.

Employees don't create wealth. What creates wealth is the combination of "factors of production". Employees typically supply one of those factors - labour.

Classical economics recognizes two others - land and capital.

I believe 'creating wealth' is a recent catchphrase.
In fact, classical economists - eg Smith and Ricardo - asserted that the value of a product was the labour that had gone into producing it. I think you're talking about neoclassical economics, which dispenses with the labour theory of value.

There is a relevant difference between labour on the one hand and land and capital on the other. 'Creating wealth' is an activity performed by people. Land is not people and doesn't perform any activities. Nor does capital perform any activity. Labour is the only element here that is actually doing anything and therefore the only thing that can be described untendentiously as creating.
Just as a carpenter might be unable to build a wardrobe without wood and a hammer and saw, but one would still say that the carpenter built the wardrobe, and not that the wood or the hammer and saw built the wardrobe.

You've been arguing on this thread that people should be differentiated from abstractions. Yet now you're suddenly ranking abstractions such as capital and land alongside actual people.

If you're going to talk about creating wealth then it's the people working who do the creating.

quote:
quote:

I would have thought that the idea that there is such a thing as a fair day's wage for a fair day's work is itself a socially-progressive position. After all, it implies that the business owner has some obligation not to negotiate down the price of labour beyond a fair level.

The difficulty, of course, is determining what "fair" is; can it mean something other than the medium-term "going rate" for that particular input ?
Most neo-classical economists prefer to avoid talk of fairness just to avoid the problem. You however introduced it. 'Fair' clearly means something in non-economic contexts. If you think my example of the bakery doesn't apply the non-economic concept I think you'd better explain why. You'll note that my treatment of the oven covers the role of capital.

quote:
And no, if social-progressivism is about redress for perceived past injustice, then advocating any model as being a priori fair is not a social-progressive position.
I'm not entirely sure why not. If you split the cake between twelve children and some children get two pieces and some none that's unfair. But apparently you don't think that redressing the injustice by taking one piece of cake from each of the children with two pieces and giving them to the children with none has anything to do with fairness. Why not?

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Doc Tor
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I have no idea why Russ just doesn't come out and say it's only land or capital that counts, and those who already have land or capital or both are the only ones that count. All the laws he's defending, all the tax breaks, all the perks, everything, favour those who don't work over those who do.

Six pages on, and it was already evident from the OP. The poor, the marginalised, the dispossessed can go hang and if they try to organise, they're essentially stealing from those who rightfully own the wealth and the power. Rightfully, because they already have it. This is nothing more than the Divine Right of Kings dressed up to wear capitalist clothing.

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Forward the New Republic

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Caissa
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Capitalism is an economic system based on exploitation. That makes it evil in my books.
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Russ
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# 120

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quote:
Originally posted by Crœsos:
Labor doesn't "create wealth" because it's just one factor, but an entrepreneur does create wealth despite the fact that, like an employee, they are also not a tract of land. If the objection applies to one it applies to both.

You're right; the objection applies to both. The entrepreneur in isolation does not create wealth; his input is only one factor. One of 5, in the system I'm proposing, which recognises the positive role of government.

"Make it happen" and "initiative" are my clumsy way of trying to describe what the entrepreneurial factor contributes. Feel free to suggest better words.

In Dafyd's bakery example, the workers were also the joint entrepreneurs. I've nothing against that happening, but it muddies the situation rather than clarifying it.

An entrepreneur who is distinct from the labourers may indeed want to pay minimum wages. And minimum rent and minimum interest on a bank loan to capitalise the business and minimum tax. So as to create a profitable business.

From the comments so far the problem with that seems to be entirely that social progressives sympathize with labourers in a way that they don't sympathize with landlords and bankers. Not sure about governments...

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

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Russ
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# 120

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quote:
Originally posted by Dafyd:
If you split the cake between twelve children and some children get two pieces and some none that's unfair. But apparently you don't think that redressing the injustice by taking one piece of cake from each of the children with two pieces and giving them to the children with none has anything to do with fairness. Why not?

That's not redress. That's having a clear notion of fairness and applying it to today's birthday cake.

Redress is believing in a narrative that at last week's party the older children got more than their fair share of cake. And therefore trying to compensate by giving bigger slices of today's cake to the younger children.

Skipping over the difficult step of quantifying what's fair when people have different-sized appetites.

Even though it's a different set of children at today's party.

--------------------
Wish everyone well; the enemy is not people, the enemy is wrong ideas

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chris stiles
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# 12641

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quote:
Originally posted by Russ:

Even though it's a different set of children at today's party.

You are making the assumption that there is no connection between the two sets of children.

I did think it was mistaken two pages back - now I assume its just an exercise in self justification.

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Soror Magna
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Economics must the most useless and noxious discipline on the planet. There are real improvements in my life and health thanks to the real sciences; I enjoy beauty and pleasure and wisdom created by the arts; I live in a more just society thanks to the humanities. The only purpose of economics seems to be to find more and more ways to make rich people richer.

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

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Arethosemyfeet
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# 17047

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quote:
Originally posted by Soror Magna:
Economics must the most useless and noxious discipline on the planet. There are real improvements in my life and health thanks to the real sciences; I enjoy beauty and pleasure and wisdom created by the arts; I live in a more just society thanks to the humanities. The only purpose of economics seems to be to find more and more ways to make rich people richer.

Keynesian economics created the most equal society the UK had ever seen, and wages for the lowest paid have barely risen in real terms since it was abandoned. The problem is how you use economics. All recent governments have advocated letting the rich get as rich as possible then begging them for scraps. Economics can equally be used to ensure working people get their fair share of the fruits of their labour.
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mr cheesy
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quote:
Originally posted by Russ:


From the comments so far the problem with that seems to be entirely that social progressives sympathize with labourers in a way that they don't sympathize with landlords and bankers. Not sure about governments...

Correct, social progressives sympathise with anyone who is being exploited. At best they tolerate capitalists who actually pay proper wages.

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arse

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Karl: Liberal Backslider
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On cake - it's more recognising that some children are more favoured by the host and get given more cake because of who they are, and saying "hang on, what about the quiet one over there?" and making more effort to get him his cake.

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Might as well ask the bloody cat.

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Dafyd
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# 5549

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quote:
Originally posted by Russ:
An entrepreneur who is distinct from the labourers may indeed want to pay minimum wages. And minimum rent and minimum interest on a bank loan to capitalise the business and minimum tax. So as to create a profitable business.

Hang on - weren't you saying that creating a profitable business was something that created wealth all round? And therefore wasn't a zero-sum game that that requires withholding wages and rent and income from the other parties involved.

What is an entrepreneur anyway? There's some talk of entrepreneurs as if they're a special class of individuals who have magic entrepreneuring powers and so are not subject to the rules applying to lesser mortals. I don't think that's mainstream economics though.

There are two activities that someone might be thinking of when they talk about an entrepreneur.
One is the entrepreneur who starts up a new business of a similar kind to businesses that already exist. They see that the demand for bread is outstripping the supply of bread and so they start up a new bakery. Now in neoclassical economics this kind of entrepreneur is not a special class of person. The market will settle into an equilibrium where the rewards minus the risks of starting a new business equal the income such a person could earn by remaining the employee of an existing business.

Then there's the Schumpeter-entrepreneur who is genuinely innovating. They set up a temporary monopoly on whatever their innovation is and so get a pay off by exploiting the resulting market failure. That is something of a special case and you can perhaps justify the results and still appeal to fairness somehow or talk about resources created for the whole of society.
Although here the benefits of the innovator to themselves are supposed to be only temporary, until the rest of the market catches up. You don't want the monopoly to become established. The reward is still supposed to be a one-off reward.

There comes an ideological problem if the first sort of entrepreneur is treated in discourse as being essentially the same sort of thing as the second sort. In that the case the first sort is being justified as a benefit society as a whole in ways that they are not actually a benefit to society.

[ 05. October 2017, 10:15: Message edited by: Dafyd ]

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Dafyd
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# 5549

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quote:
Originally posted by Russ:
Redress is believing in a narrative that at last week's party the older children got more than their fair share of cake. And therefore trying to compensate by giving bigger slices of today's cake to the younger children.

And your justification for thinking that's not a straw man is?

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

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Crœsos
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# 238

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quote:
Originally posted by Russ:
quote:
Originally posted by Dafyd:
If you split the cake between twelve children and some children get two pieces and some none that's unfair. But apparently you don't think that redressing the injustice by taking one piece of cake from each of the children with two pieces and giving them to the children with none has anything to do with fairness. Why not?

That's not redress.
Why not? It would seem to fit both the dictionary and legal definitions of the term.

--------------------
Humani nil a me alienum puto

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Russ
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# 120

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quote:
Originally posted by Dafyd:

There are two activities that someone might be thinking of when they talk about an entrepreneur.

One is the entrepreneur who starts up a new business of a similar kind to businesses that already exist. They see that the demand for bread is outstripping the supply of bread and so they start up a new bakery...

Then there's the Schumpeter-entrepreneur who is genuinely innovating. They set up a temporary monopoly on whatever their innovation is and so get a pay off by exploiting the resulting market failure.

While there's much in what you say, it says more about different economic models than about entrepreneurs.

In classical economics, system behaviour is described by a stable equilibrium between supply and demand curves. There is indeed a distinction between the supply-side response described by a particular curve (producing more or less of the same good in response to a price signal) and a shift of that curve as innovation (technical or organisational) changes the characteristics of the market. But in both cases the behaviour of individual entrepreneurs is considered an unimportant detail. It's portrayed as something like a law of nature that some new or expanded business will arise; it doesn't depend on any extraordinary individual.

Conversely, Schumpeter's model is dynamic and evolutionary. He posits a continuous process of businesses starting up, each seeking some small advantage over their rivals - in efficiency, in quality, in marketing, whatever - with the losers going to the wall. In times of rapid technological or organisational development, it just happens faster and some of the advantages are more substantial.

You're right to talk about a risk premium - the entrepreneur usually has to stake his own money on the highly uncertain success of a start-up business that applies his ideas. And his reward has to reflect both the risk and the contribution of those ideas.

If the business does survive, he either becomes an owner-manager who drives the continuous improvement of the business. Or sells his interest and goes off to start another business...

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Wish everyone well; the enemy is not people, the enemy is wrong ideas

Posts: 2991 | From: rural Ireland | Registered: May 2001  |  IP: Logged
Dafyd
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# 5549

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quote:
Originally posted by Russ:
While there's much in what you say, it says more about different economic models than about entrepreneurs.

That means that one rather has to specify the economic model one's using before one talks about entrepreneurs. As I said, if you confuse the two you start inventing magical entrepreneur powers that give the possessor special rights and privileges.

quote:
You're right to talk about a risk premium - the entrepreneur usually has to stake his own money on the highly uncertain success of a start-up business that applies his ideas. And his reward has to reflect both the risk and the contribution of those ideas.
As I said, the reward for the risk can be calculated as a strictly finite proportion of the sum risked. (Probably it is less than the sum risked unless the entrepreneur was gambling on a business more likely than not to fail.)

As for reward for having the idea: suppose the person who has the idea is an employee and decides to take the idea to her present employer rather than to found her own company. One would assume that the fair reward or the market rate is the same in both cases.
But there's no suggestion even in Schumpeter that the reward for ideas is an ongoing reward. Any benefit to the new enterprise from innovation lasts only until other enterprises can copy the idea.

[ 10. October 2017, 10:04: Message edited by: Dafyd ]

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10328 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
mr cheesy
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# 3330

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quote:
Originally posted by Russ:

You're right to talk about a risk premium - the entrepreneur usually has to stake his own money on the highly uncertain success of a start-up business that applies his ideas. And his reward has to reflect both the risk and the contribution of those ideas.

Rubbish. The entrepeneur usually stakes other people's money* hence when he becomes inevitably bankrupt, he's not actually thrown onto the street.

* the banks, friends-and-family's, other investors, public grants, other public money etc

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arse

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